What is liquidity in crypto?

Liquidity: How much money sits in the trading pool, which decides how much you can buy or sell without moving the price.

A token with $5k of liquidity jumps or crashes on a single $500 trade, and you may not be able to sell at the price you see. Liquidity can also be pulled by the creator, which is the classic rug pull. MemeSonar ignores tokens with liquidity under $10k and treats a pool smaller than 0.2% of the market cap as a fake price.

Example

A $1M token with $300k liquidity is easy to trade; a $1M token with $2k liquidity is a trap.

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What is liquidity in crypto?

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